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. Last Updated: 07/27/2016

Vozrozhdeniye’s 2009 Net Beats Expectation

Vozrozhdeniye posted a smaller-than-expected drop in 2009 net profit Wednesday, outperforming bigger banks thanks to lower exposure to recession-hit sectors such as construction.

The midsized bank reported a 61 percent drop in net profit to 1.21 billion rubles ($41 million) and said a slowdown in bad loan growth meant the worst was over for the sector.

Analysts had expected the bank, ranked among the country's top 30, to post a net profit of 1.1 billion rubles, compared with 3.1 billion rubles in 2008.

Russian banks have been hit by rising bad loans as the economy suffered its first contraction in a decade, but the sector hopes to return to pre-crisis profitability this year.

Vozrozhdeniye's bad loans grew only 0.6 percent — or by 500 million rubles — in the fourth quarter, versus 1.7 billion rubles in the previous three months. The share of overdue loans reached 9.9 percent of its total loan portfolio.

"It means the worst is over for Russia's banking system," the bank said in a statement.

The bank, widely exposed to the Moscow region, has reduced its loan portfolio by 4.7 percent from December 2008 levels to 85.2 billion rubles.